Risk assets mostly consolidated with no dominant theme driving sentiment.
The euro traded relatively heavy after the S&P lowered Greece's outlook to negative, Spain revised budget deficit targets and a 0.9% drop was reported in Germany's June industrial production. Other than that, it was a fairly quiet session for risk assets, with earnings the dominant theme. Looking at the risk currencies, AUD/USD was stuck in a range between 1.054 and 1.058.
On the local economic front, we have jobs numbers due out today with the unemployment rate expected to tick up to 5.3% with 10,200 jobs added. EUR/USD fell from 1.24 to lows of around 1.232, which is not much of a move. We could potentially see some big moves in the risk space in the Asian session today with plenty of data due out from China. We do not expect the BoJ to announce a full-fledged easing move at the conclusion of its policy meeting today, despite weak Japanese data in recent weeks. That the BoJ is finding it hard to meet its year-end target of asset purchases, ¥65 trillion, makes an increase in the size of the Asset Purchase Programme (APP) unlikely. The BoJ instead is likely to focus on a few fine-tuning operations aimed to pre-empt the under-subscription of the APP buying operations.
Heavy EUR/JPY selling pushed the USD/JPY down to 78.23 before a push higher in US Treasury yields sent it back to 78.47 into the close, down 0.15% on the day. China CPI will be in focus today and is expected to show a 1.7% increase in July from a year earlier, the least since January 2010. Such a moderation in inflation would provide more room for monetary policy easing. We also have fixed asset investment, industrial production and retail sales due out from China.